Boulder's Canopy launches $50M venture fund for cannabis companies

Dhaval Shah, with Ganja Boxes, pitches his business to investors during a Canopy Boulder event on Wednesday at the eTown Hall in Boulder. (Jeremy Papasso / Staff Photographer)

A Boulder-based cannabis accelerator is raising a new pool of cash to help early stage companies that have survived their startup pains grow to the next level.

Canopy Ventures, the new investment arm of the accelerator, said Tuesday that it is launching a $50 million venture fund that will focus on tech-based cannabis companies.

The accelerator, since its start in 2015, has invested seed-stage capital in 73 companies, many of which have gone through its accelerator program.

This new fund is to help finance more mature, so-called growth stage companies, according to Canopy Managing Director Micah Tapman.

"The anticipation is that we will be investing $750,000 to $1 million into each company and we anticipate investing in 15 to 20 companies," Tapman said.

As legalization of recreational and medical marijuana continues to spread nationwide, with California being the biggest market to open thus far, more than a dozen venture capital and private equity funds have launched to serve the market, according to market research site Investopedia.

Canopy's $50 million fund is mid-sized according to several tracking firms, with at least one firm raising more than $100 million in investment cash.

Jamul Jadamba, managing director of Propagule, LLC, is one of the initial investors in Canopy Ventures I. In a statement he said, "On the macro level, we recognize the historic opportunity presented by the legal cannabis industry. We believe that legalization in North America and across the globe is a secular trend that makes moral sense and has become irreversible," he said. "We invested in the fund because it has the right strategy and the Canopy team has the expertise, experience and access to execute it."

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Tapman said he expects to complete one or two initial investments by the end of the first quarter of 2018 and finish raising the $50 million later this year.

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